The co-founders of a major hemp products producer want federal regulators to develop procedures and guidelines for commercial haulers of hemp and hemp-processing materials.
In a white paper submitted to the Federal Motor Carrier Safety Administration’s (FMCSA) Motor Carrier Advisory Committee (MCSAC) this week, Brett Goldman and Steve Bevan, co-founders of GenCanna Global, asked the committee to consider defining standard operating procedures (SOPs) for all compliant hemp, as well as develop guidelines for transporting non-compliant “work in process” hemp materials across state lines.
Their experience in hemp transportation revealed the need for those SOPs to “include training of drivers, bills of lading and cargo manifests, copies of hemp licenses, and coordination with law enforcement (in certain cases),” according to the co-founders’ paper.
“All competent business operators – from the farm to the store shelf – want compliance above all. Simply demonstrating traceability along with regulatory compliance satisfies this need, as it does for all other crops and foods/supplements derived from those crops.”
Goldman and Bevan, who are also founding members of the US Hemp Roundtable, which lobbies on behalf of hemp producers and makers of hemp-generated cannabidiol (CBD), also recommend creating guidance for how law enforcement interprets and enforces federal hemp transportation regulations.
“All transportation of hemp must be legal, but there is clearly an area where federal and state regulations are in conflict,” they assert in their white paper. “The kernel of the issue is strict compliance with federal law. The 2018 Farm Bill…provides the federal umbrella for approval of state and tribal sanctioning of the hemp industry.”
The federal authorization legalizing hemp, however, has not prevented truckers from getting stopped, fined and even jailed for transporting the product, including a high-profile case in Idaho last year.
An interim final rule (IFR) issued last year by the U.S. Department of Agriculture (USDA) attempts to resolve the federal-state conflict by prohibiting states from stopping the transportation of hemp, even in states without hemp production programs.
But Goldman and Bevan point out that the rule has “some glaring omissions,” including oversight of the transport of federally non-compliant materials created during the processing phase that have levels of tetrahydrocannabinol – known as THC – greater than 0.3%. Such non-compliant materials are known as “work in process” that must be transported for final processing.
While many states have added regulatory policies for moving those materials from one permitted processor to another within the state, “at this time we are unaware of any federal regulation that would allow for the legal transportation” of work in process with THC above 0.3% across any state, according to the co-founders.
“The IFR…authorizes states and tribes to regulate all aspects of hemp growing but is silent on hemp processing. Processing is the key to unlocking hemp’s economic value chain, and like other agricultural commodities, is often beyond the scope of USDA.”
As far as regulatory jurisdiction, Goldman and Bevan assert that USDA will drive policy development but with sign-off from the U.S. Department of Transportation and the U.S. Drug Enforcement Administration. “Effectively, this means that the ‘work in process’ is landlocked within each state as there is no existing federal regulatory framework that enables interstate transportation.”
After filing for Chapter 11 bankruptcy protection in February, GenCanna subsequently sold its assets to funds managed by its long-term investor, MGG Investment Group.
MGG announced in June that the transaction “will enable GenCanna to maintain its operations in Kentucky as a leading standalone CBD and wellness business with significantly reduced debt and substantial new capital to pursue growth opportunities.”
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